Wow, an excellent discourse in the uninformed and uneducated (in...

Wow, an excellent discourse in the uninformed and uneducated (in terms of geology) reading a broad discussion paper on resource estimation through rose-coloured glasses to support their fantasy about their favorite body of mineralisation.


The article does nothing to "goes a long way to explain the disconnect between the consultant's assessment of Rocklands and those who are inclined to believe that while the resource statement is very good in itself, chances are that the statement tends to understate the resource."

The consultant's assessment of Rocklands is a conservative, scientific, evidential estimation of the economic resource of the rocks within the Rocklands area. It is based on data and interpretations given by the company - not by armchair hacks on the internet who persist in believing a fantastical notion of missing native copper.

While it is good to see you gain some security from reading a paper which discusses the various tradeoffs and pitfalls which the professional geologist must take account of in the normal day-to-day discharge of his or her duties, nowhere does this paper you cite refer in any way to the Rocklands deposit itself, nor in any company press release has there been any discussions of these issues raised, so your conclusions are based on conjecture.

You say that the Consultants had to err on the side of caution. Are you inferring or implying that they in some way held the company back from a more...bullish or conjectural or fantastical resource estimate? One where, I would guess, the mythological bonanza native copper was not trimmed out? Are you suggesting that the company had their evidence for a bonanza zone, and the consultants pooh-poohed the idea as fantasy, said "Sorry guys, thats total bulldust. This isn't July 2006. You can't assume an SG of 3.8, you can't include unassayed holes. You have to use a MIK model and not a polygonal estimate. You have to take the hit in diluting the native copper because your SMU is too wide for it, its too nuggety and discontinuous, and you haven't proven beyond a doubt that its valid to include a solid workable body of native copper."

Because, actually, that's probably what they said. And guess what, that's the appropriate way to go - even the paper you cite says this.

I think you take sentences like this: "The need to use common sense during a Resource or Reserve estimation exercise would
seem to be self-evident. It is surprising, however, how often rigid adherence to
procedures and methods prevails at the expense of clear thinking, usually with adverse
and sometimes fatal effects on the project under consideration." as meaning that there is no value in rigid adherence to rules. That the JORC code is a straitjacket that is harshing the buzz, crimping the Company's style, holding them back from 2006-esque declarations.

Well, clearly the more the company tries to work outside the "rules" and is less "rigid" in its disclosure, the more often it finds itself in hot water or embarassed by the next resource update.


Your apprehension of the statistics of resource estimation is also completely wrong. In Multi-Indicator Kriging, the probability density function does not assign a zero grade between two holes at the midpoint. There is no magical downgrade of the resource occurring by some mathematical falsehood where you have to drill at 12.5m centres only to see the 6.25m midpoint assigned a zero grade; this is a law of diminishing returns and would see the least drilled version of a body of mineralisation always be higher grade. This may fit your model of how you can turn 59Mt @ 2% into 250Mt @ 0.48% by quadrupling the drill density to cut the gade by a quarter but it just doesn't work like that. It may be a theory of how to explain the continuing disappointment of grades, but how do you explain other companies like DML upgrading their resources with infill drilling, or iron ore resources maintaining a consistent grade despite drilling more and more? How could you ever get a gold deposit to hold up underground on a 5m x 5m grade control grid - 75% of the resource would be assigned a grade of zero!

The grade of the blocks is assigned separately from the probability of that grade being true. The probability of the grade being true approaches zero at the edge of the search ellipse. If your holes are 50m apart you use a 50m search ellipse; one hole therefore assigns 100% grade confidence at 0m and 0% at 50m, which is where the other hole is. That other hole assigns its grade confidence similarly; at the midpoint the grade confidence is a mixture of the two holes' contributions.

Note also that this is from each and every sampling point in three dimensions. Thus, you end up with any one block having data inputs from all available data points, (usually capped at 16 or thereabouts) and the whole block is assigned a uniform grade as calculated from those inputs. This means there is no miracle 0% grade halfway down an ore block.

The historical grades at double oxide have no impact on the resource. This was a bunch of guys with donkeys and picks and shovels winkling the best stuff they could get from the ground and leaving the rest aside. This is why ALL historical mining looks better than the modern high-volume bulk mining we perform in the modern world. There is all likelihood if McCrae gets jack of the ASX he could make a pretty penny sinking a shaft and teasing copper from the ground with a shovel. He could even achieve a head grade of 92% Cu. Just not many tonnes.

Keep searching for the golden needle in the haystack.